LAND OF THE REGULATED: TRILLIONS IN REGULATIONS DROWNING US ECONOMY
by Jeff Berwick, Dollar Vigilante
As if it wasn't bad enough that the US federal government extorts its citizens for more than $2 trillion per year in taxes and the Federal Reserve devalues the US dollar by nearly 10% per year… but at the same time trillions more is wasted via regulation.
In an annual report just issued by the Competitive Enterprise Institute (CEI) entitled ‘10,000 Commandments’ (see report here), they estimated that the total cost for Americans to comply with the myriad of regulations stipulated by the government in the Land of the Free was $1.86 trillion in 2013.
If that number is even close to accurate that is an insanely large amount for something that is completely unneccesary and actually restricts economic growth dramatically.
The government does not need to regulate the market. Companies have the highest self-interest of anyone to ensure that their products or services are not faulty. If a restaurant keeps making their customers sick due to poor hygiene they won't be in business very long. If an airline keeps crashing its planes due to poor practices no one will ever fly with them again and they'll be out of business. The market is the best regulator.
When government "regulates" businesses all it does is add an uncaring, unincentivized and usually corrupt group of bureaucrats who get paid (via taxes) from the very people who are paying for the products they are purchasing to make it more expensive and less economically feasible to offer those products.
It wouldn't be so bad if all these extra layers of regulation only made things cost much more with no added benefit. But it is much worse than that. A myriad of regulations stifles the economy and makes it nearly impossible for small businesses to succeed. And, the big businesses are in favor of regulation as it offers a barrier to entry for competition… which in turn makes the market much less competitive which worsens quality of service and increases costs.
The amount of regulations are enormous. In the 21 years of issuing this report on regulations, 87,282 final rules have been issued. That’s more than 3,500 per year or about nine per day. The 2013 Federal Register contains 79,311 pages, the fourth highest ever. The top two all-time totals are 81,405 pages in 2010 and 81,247 in 2011. And the total cost per household to have the government "check" everything that you buy, eat, breathe or drink works out to an average of $14,974 per household in the US!
All for things that are completely unnecessary and just employ an army of bureaucrats that produce nothing and ruin the economy.
This clearly shows in World Bank Group's "Doing Business" rankings.
Want to guess where the country known by many as the Land of the Free and home of "capitalism" (just add an r to that word and they would have it right) ranks against other countries in terms of "ease of doing business"?
C'mon take a guess.
The USSA ranks 46th behind countries such as Armenia, Georgia, Krygyz Republic, Azerbaijan, Burundi, São Tomé and Príncipe, Russia and dozens of others!
In 2012, John Stossel went through the procedures to open a child's lemonade stand. Of course, before the US turned into a communist country it would have involved getting some lemons and cups and then make some money.
Here is what it takes now:
But, hey, at least we'll be safe (if you can avoid being put into the world's largest prison population or being shot by a cop)! Who knows what kind of things kids would put in their lemonade if they weren't being watched over by an army of checkers, testers and stampers.
And imagine if you wanted to start something a bit bigger than a child's lemonade stand like a restaurant or a bar?
All these regulations do is impoverish people, destroy capital and make it harder for small business to compete as can be seen by the following chart.
The total amount of self-employed people has been decline for the last 25 years and this is total numbers during a time where the population has expanded tremendously. In 1990 the total US population was below 250 million. Today it is above 315 million. So, during a time where the population expanded by 65 million people, there are nearly 1 million less self-employed people in the country.
In other words, that chart, if adjusted for population increases would look like a total collapse.
At one time the US could rightly call itself the Land of the Free and the Land of Opportunity. Those days are decades past.
If you want to look at countries that have more opportunity start with the 44 countries ahead of the US in "ease of doing business" at the very least.
At The Dollar Vigilante (subscribe here) we have a worldwide network of liberty minded entreprenurial expats that can help you find a place with opportunity. There is lots out there. As for the US, it's dead, baby, and getting worse by the day.